At Hansa Cequity, we believe successful enterprises of tomorrow will be the ones who can organize and leverage customer information at speed , to optimize their marketing performance, increase accountability, improve profit and deliver growth. Hansa Cequity insights will bring to you trends and insights in this area and it's our way of sharing best practices so as to help you accelerate this culture and thinking in your organization. We call this kind of an approach Analytical Marketing and we will constantly bring in "best practices" for improving your capabilities in Analytical Marketing.

Get Updates by Email

Your email:

Browse by Tag

Current Articles | RSS Feed RSS Feed

Customer information value is = to 0 on company balance sheets

  
  
  

Customer data is a valuable asset. Why not treat it that way?

Analytics & data are words that have become very popular now. Black gold. Texas Tea & “Information is the new oil” are those catch statements that are now used so often (more than 1.3 million Google search results). This has led to creation of “Infonomics”, a term coined by Gartner’s Doug Laney, which describes the act of quantifying, managing and leveraging information as a formal business asset. Although generally accepted accounting principles (GAAP) as yet do not require the reporting of information assets on the balance sheet, infonomics deems that organizations acknowledge that information is more than merely a resource.

Companies are behaving as if information has a monetary value. The question is how much?

“It’s flummoxing that companies have better accounting for their office furniture than their information assets,” said Douglas Laney, an analyst at technology research and consulting firm Gartner Inc. “You can’t manage what you don’t measure.”

Corporate holdings of data and other “intangible assets,” such as patents, trademarks and copyrights, could be worth more than $8 trillion, according to Leonard Nakamura, an economist at the Federal Reserve Bank of Philadelphia.

Tobin’s q is a simple ratio first posited by Nobel-winning American economist James Tobin in the 1960s to understand the relationship between a company’s market value and the replacement value of its assets. Tobin’s q has more than doubled from 0.4 in 1945 to a predicted 1.1 in any given year currently. This means that in general markets now value companies more than the sum of their tangible assets. How can this be?  Non-reportable intangible assets of course.

tobins q resized 600

Doug Laney has this very interesting view

“At Gartner, our infonomics research shows how information meets the criteria of a recognizable (balance sheet) asset. Yet, because the accounting aristocracy continues to prevent organizations from recognizing it, information continues to be managed with far less discipline than financial, physical assets or recognizable intangibles. We have also shown how organizations that are more information-centric have market-to-book values that are 200-300% higher than the S&P average”

Facebook, eBay and Google have combined assets minus combined debt of $125 billion. But the combined value of shares is $660 billion. The difference reflects the stock market’s understanding that the companies’ key assets, such as search algorithms, patents and huge  information on their users and customers, don’t show up on their balance sheets.

So how do you value your personal information? How much does the market pay for it?

Alexis C. Madrigal has this interesting take: “ User profiles -- slices of our digital selves -- are sold in large chunks, i .e. at least 10,000 in a batch. On the high end, they go for $0.005 per profile, according to advertising-industry sources. But maybe that's not the right way to value the data. After all, each profile of you being sold only takes advantage of some subset of your information. Facebook and Google make roughly $5 and $20 per user, respectively. Without your data in one form or another, their advertising would be mostly worthless, so perhaps your data is worth something in that range. But let's not forget the rest of the Internet advertising ecosystem either, which the Internet Advertising Bureau says supported $300 billion in economic activity last year. That's more than $1,200 per Internet user and much of the online advertising industry's success is predicated on the use of this kind of targeting data”.

 userdata 615 resized 600

This is leading to some interesting business models:

  1. A Washington based startup, Personal wants users to entrust their data to Personal and then give it out to advertisers in exchange for discounts. Your data paired with your purchase intent could yield massive efficiency for advertisers, some of which would be passed on to you in the form of discounts.
  2. Supermarket operator Kroger Co records what customers buy at its more than 2,600 stores and also tracks the purchasing history of its roughly 55 million loyalty-card members. It sifts this data for trends and then, through a joint venture, sells the information to the vendors who stock its shelves with goods ranging from cereals to sodas. Gartner predicts that 30 percent of businesses will monetize their information assets directly by 2016. Good data is like good ingredients. Some combinations can be extremely appetizing and even sustaining. Will companies learn to share data or will the Indian crab syndrome come in the way. Consumer-products makers like Procter & Gamble Co and Nestlé SA are willing to pay for those insights because it allows them to tailor their products and marketing to consumer preferences. Gartner estimates that Kroger rakes in $100 million a year from data sales.

 

 

 

Designers & Banks: Oxymorons

  
  
  

What does design have to do with finance, money and banking?

New banks in India ,IDFC & Bandhan, better be listening. A bank acquiring a creative organization- that’s news! Adaptive Path, a design and user experience consultancy has been acquired by Capitol One. And just before that Daniel Makoski, founder of Google’s modular Project Ara phone project joined Capital One.So how come banks are attracting this serious Creative talent!

user experience resized 600

http://www.adaptivepath.com/ideas/adaptive-path-where-were-going-next/ 

In the new digital world, banking & creativity may not be oxymorons!

New banks in India have a unique opportunity to embed “digital” in the fabric of how they do business. But banks are complex with structures that don’t allow for speed. In many cases, eBusiness teams own the mobile banking strategy, but few eBusiness teams have an exclusive mandate over their firm’s mobile banking initiatives. This division of responsibility creates silos and adds significant complexity to the coordination and optimization of Digital efforts.And yet, the user experience is the key for more consumers to adopt the bank’s digital channels.

 

 

AdaptivePath CEO Brandon Schauer puts it well, when he writes:

"Whether we talk about greeting cards, mobile apps, or vacation get-aways, the experience is the product. From the perspective of customers, everything that goes into making up that experience—technology, materials, service support, or a supply chain—simply becomes the magic behind the experience.

Yet the orientation and focus of our businesses is the inverse of this customer perspective. We plan around features and operational functions, leaving the customer experience as an unintentional byproduct of how the pieces and parts happen to come together for the customer".

As the infrastructure of digital technology — the chips, network connections, computing — becomes ever cheaper, they’re becoming commodities, and the value of tech products is shifting to the design and the user experience. But the real value starts to flow when companies orchestrate the User experience with Personalisation.

Personalization, it seems, is really about gathering exactly the data that’s needed in order to perform a particular task. Think about how Amazon asks users whether purchases were for themselves or as gifts, or how streaming services like Netflix and Pandora ask users to rate content. But personalization is a complex process involving multiple components:

 

The Financial services business actually can generate significant amount of user data to help personalize its offerings. Here is an interesting example of a Lending company in California, LendUp, which is doing this effectively.

User experience lendupslider resized 600

LendUp wants to give those looking for a speedy fix to a short-term financial need, a way to borrow money without hidden fees and high interest rates. LendUp believes that really understanding its users makes all the difference in the world. The company is trying to be a low-friction source of relatively cheap loans for under banked individuals.

LendUp’s solution is pairing smart site design with smarter algorithms.

LendUp asks for standard data from each applicant (including Social Security number so it can look at credit scores and other data), but also asks certain applicants to connect using Twitter and Facebook. Also LendUp offers financial literacy education in the form of online webinars. Customers are incentivized to use these facilities with the knowledge that participation improves their loan rates and potentially increases their loan size in the future. LendUp found that borrowers who completed at least one of their free education modules were 80% more likely to repay. LendUp also found that repayment rates continue to rise as borrowers complete more education modules, suggesting that borrowers can apply and build on knowledge gained through a bank sponsored education program.

Userv experience lendupquiz resized 600

Obviously, the data LendUp generates about how people interact (by completing those credit-building lessons, for example) and repay once they’re in the system also helps the company determine future rates.

 So quite a few pointers for us as Marketers:

  1. This is the age where Creative & data intersect. If banks have realised it, many other industries can profit from it.
  2. Thinking about the user interface for consumers, making it intuitive & easy & allowing data to be picked up through gamification are possible ways ahead.
  3. Analytics can help in continously fine tuning the User interface & improving the consumer experience.

How prostitution,alcohol & data science impact Uber ?

  
  
  

If you thought Uber was just a car service company, it's a tech company that happens to be a car service too. No wonder it has neuroscientists amongst more traditional hires in the company! The data team at Uber uses data science for fundamental problems such as ETA algorithms (“Your driver will be here in 5 minutes”), pricing algorithms, fare estimators, and heat maps to show passengers the current position of their driver.

Uber1 resized 600

Uber‘s $1.2 billion financing tells a story- the imputed value for Uber (pre-money, i.e., prior to the influx of $1.2 billion) was $17 billion, a mind-boggling sum for a business that generates a couple of hundred million in revenues.

Both Lyft (another car sharing company) & Uber have attracted massive financing. Now that each team has a quarter-billion dollars in its pocket, the World championships can begin.

 Uber investments resized 600

Uber is trying to use the "movement pattern" data that it gets to more sharply understand its users. Here are 3 examples in the words of the Uber data scientists that I found fascinating:

  1. Understanding Destination choices: Where has this person gone in the past? Do they frequent a certain bar? Where do other Uber users go? What businesses are popular generally? These are the basic questions the algorithm asks. On top of that, it smartly considers factors like time of day (people don't typically go to night clubs at 11 a.m.), distance (people aren't likely to get dropped off too far from their actual destination) and even the Zip code of each destination (Sketchy neighborhood? They probably didn't want to walk far, so the destination is likely near the drop-off point).
  2. Static or dynamic drivers:In another blog post , Uber data scientist Bradley Voytek explains how Uber’s “science team” simulated a city and learned that taxi drivers can just stay parked between trips and make twice as much as those who drive around in search of passengers. Uber discovered that “drivers who are constantly, randomly moving around a simulated city travel 10-20 times the distance compared to drivers who remain stationary or gravitate back toward a demand density between trips,” Voytek writes.
  3. Prostitution, Alcohol & Uber: To examine this Uber data scientists’ looked at the correlation between the number of each type of crime and the number of trips they've done in each neighbourhood. All types of crime except murder, vehicle theft, and arson were positively correlated with number of trips. After correcting for multiple comparisons, four crimes remained significantly correlated: Prostitution,Alcohol,Theft,Burglary. In other words: The parts of San Francisco that have the most prostitution, alcohol, theft, and burglary also have the most Uber rides! Party hard but be safe, Uberites!

So once you start to see the company as a data, tech & analytics company, the possibilities really start to become huge:

  1. Uber is now going after a huge new opportunity by changing the way business users can book and expense rides on its platform. The company is launching a new offering, called “Uber for Business”, which is designed to make it easier for users to bill trips directly to their company while working. Uber is providing participating companies with a centralized dashboard which they can use to keep track of rides that have been expensed. The new product is basically an acknowledgment that many consumers have been using Uber for both personal and business use cases, but their employers didn’t have a good way to manage those expenses.
  2. Uber has also moved into the fast-food delivery industry with its new service "UberFRESH", which it claims will deliver meals from local restaurants in less than 10 minutes. Uber isn’t taking on a fleet of new driving staff for the service. Instead it’s going to use its taxi drivers to relay the food between restaurant and customer. There will also be no extra delivery cost but drivers won’t leave their car to hand over the food, customers will have to collect it from the street.

How relevant is all this to a company in any traditional business?  Here are some thoughts:

  1. It’s never too late to start embedding data based thinking in your business. Data based companies like Google, AirBnB, Uber etc will get to your industry at some point.
  2. Think about cross functional IT & business teams that are programmed like a guerrilla unit to solve specific problems.Get creative people into these roles.
  3. Introspect on what kind of people you are attracting for your analytics team-look for non traditional hires from the science field!
  4. Ask yourself whether you are keeping all your data. Storage is less expensive now. At Uber, they have got every GPS point for every trip ever taken at Uber, going back to the Trip #1
  5. One of the delights of using Uber is getting your receipt by email once your ride is done-for many businesses this could be a simple way of creating a customer experience & continuing to build a customer database.

    As city-wide urban infrastructures such as buses, taxis, public utilities and roads become digital, the datasets obtained can be used for tracking movement patterns through space and time.

    The identification, analysis and comparison of such patterns will provide greater insights on human movement and contribute to a better urban management and would be useful information for urban transport services provider. Imagine if Uber & a bunch of other companies started to share such data with other companies. There could be huge power in “community analytics”. If Coke & Uber were to cooperate by mashing up their data together, interesting opportunities could develop from such partnerships. Where people travel & when they consume can have interesting parallels.

     

    Data driven Lingerie=Better Products

      
      
      

    How can Lingerie & data have any correlation? I am sure you are asking that questions. But bear with me & don’t forget to watch the video that I have provided a link to.

    But before that, allow me to digress a bit. Almost 78% of consumers think it is hard to trust companies when it comes to use of their personal data (Orange, The Future of Digital Trust, 2014). And yet Personal data has become a currency today. All of us are leaving our data behind in a digital exhaust that has begun to worry us as consumers.

    So, the World Economic Forum is calling personal data a ‘new asset class’: “a valuable resource for the 21st century that will touch all aspects of society”. But companies will need to understand how they can gather customer information without compromising the customer’s trust!

    A recent PEW report had this to say:

    “While enthusiasts see great potential for using Big Data, privacy advocates are worried as more and more data is collected about people - both as they knowingly disclose things in such things as their postings through social media and as they unknowingly share digital details about themselves as they march through life. Not only do the advocates worry about profiling, they also worry that those who crunch Big Data with algorithms might draw the wrong conclusions about who someone is, how she might behave in the future, and how to apply the correlations that will emerge in the data analysis.”

    But some companies are finding a way where consumers share information because they get "value" in return.

    True & co is this interesting company that combines data & design to create an opportunity for consumers to share data with the company thereby improving the appropriateness of the product to the customer. True & co claims to be the first company to fit women into their favourite bra with a fit quiz – no fitting rooms, no measuring tape, no photos. The data they collect allows them to match the customer to over 6000 body types on their database.

    data & lingerie resized 600

    Research suggests that women loathe the bra shopping experience and the massive $14B intimate apparel industry is dominated by one primarily brick-and-mortar player. So True & co uses big data to make shopping online for lingerie easier & better. They collect over Half a million data points from users to help customise the experience. Since the company launched in 2012, True & Co has collected some 7 million data points  They used this data to launch products designed using this data. Body type, implicit explicit preferences etc all mashed together to create a personalised recommendation engine.

    Do have a look at this video telling their story:

    http://bit.ly/1tiQitb

    So consumers are happy to share personal information as long as they see a “value add” for themselves. And organisations with trust-based information sharing relationships with customers will have significant competitive advantage over those with traditional data gathering relationships.

     

    Sexy Analytics, hard execution!

      
      
      

    I was speaking at IIM Lucknow last night & had a wonderful session with the MBA students about the changing nature of Marketing & how Big data & Analytics are going to play a big part in it.

    Prof Ashwani Kumar had a very interesting take on how Analytics is going to be eventually embedded across every function & not exist as just a separate specialisation.

    Prof Ashwani is doing some interesting work on Analytics at IIM Lucknow & you can have a look at his work & profile here: http://linkd.in/XRQd

    I spoke about how the changing nature of consumer behaviour is creating peta bytes of data for Marketers to analyse.And though Analytics is sexy today, companies still stuggle to adopt it & gain maximum mileage from it. So Analytics is popular but hard to execute! I also spoke about the need to bring creativity into analytics through both better "story telling" & more innovative approaches to data.

     

    And yet  in the words of a Gartner Analyst Doug Laney “companies have better sense of the value of office furniture than their information assets".

    I also spoke about how the stock market seems to value “Information based companies” far more than any others.But most companies don't report Customer data: imagine if we had Customer flow & Customer value data along with the regular balance sheet & cash flow statements!!

    Here is an interesting chart from Gartner which highlights the improved return on Information assets:

    Gartner tobins q resized 600

    Here is a copy of my presentation:

    docs/IIM LucknowAug82014.pdf

    Doug Laney has this very interesting view

    “At Gartner, our infonomics research shows how information meets the criteria of a recognizable (balance sheet) asset. Yet, because the accounting aristocracy continues to prevent organizations from recognizing it, information continues to be managed with far less discipline than financial, physical assets or recognizable intangibles. We have also shown how organizations that are more information-centric have market-to-book values that are 200-300% higher than the S&P average”

    Marketing is also changing a lot because of the access to huge amounts of Social media based customer data.

    Not just marketing, Big data is hugely changing our world & life in fundamental ways. To see the enormity of this change, have a look at the video below...

    http://bbc.in/1q35GmJ

     

    Precision journalism: Analytics needs to learn from journalists

      
      
      

    I have seen innumerable situations where bright analysts are unable to “tell stories from their data”. They have a lot of learning to do from an unrelated field-Journalism!
    Ben Fry has described it very well. Analytics or Data scientists need skills from these varied fields.

    data science resized 600

    1. Computer Science - acquire and parse data
    2. Mathematics, Statistics, & Data Mining - filter and mine
    3. Graphic Design - represent and refine
    4. Infovis and Human-Computer Interaction (HCI) - interaction

    I believe that Analytics teams have a lot to learn from the new breed of Data journalists. They have all the above skills & also work with super deadlines!

    At Cequity, our model is unique because it tries to integrate very contrasting dimensions into one entity where the sum is larger than the parts! Having a designer’s sense with data may contrast with a statistician’s dry look at numbers!

    We seek “intersection” skills-intersection of Creative, technology, data & business! Not easy to do with highly talented people & we are attempting it!

    The interesting thing is that journalism is getting far savvier with data! I see visual data based story telling in the New York Times that is absolutely mind boggling. Even here in India, I see some lovely data visualization in the Mint!

    data journalism resized 600

    But are analysts getting creative with their story telling? Visualization of data is getting democratized & it is not very difficult for analysts to be creative about this. Today we as consumers are getting far savvier about technology in our personal lives & that will impact our expectations at the work place. I am sure that savvy consumers will make data presentation so much more fun even within “enterprises”.

    I also wrote on this theme earlier here
    http://bit.ly/1uXcwlQ

    In the Media world,new business models are emerging in which data is a raw material for profit, impact, and insight, co-created with an audience that was formerly a passive consumer!

    In 2014, data journalism is mainstream and the market for data journalists is booming.New media outlets like FiveThirtyEight.com and Vox.com are competing for eyeballs with Appp3d.com from the Mirror, QZ.com from the Atlantic Media Group &The Economist’s DataBlog.
    The New York Times hired biologist and machine models expert Chris Wiggins, an associate professor of applied mathematics at Columbia University, as its chief data scientist.
    “At The New York Times, we produce a lot of content every day, but we also have a lot of data about the way people engage with that content,” Wiggins says. “[The Times] wanted to build out a data science function not only to curate and make available those data, but to learn from those data. In particular, the thing that the New York Times is interested in learning is: what makes for a good long-term relationship with a reader?”
    “On every desk in the newsroom, reporters are starting to understand that if you don’t know how to understand and manipulate data, someone who can will be faster than you, “said Scott Klein, a managing editor at ProPublica.He continued: Can you imagine a sports reporter who doesn’t know what an on-base percentage is? Or doesn’t know how to calculate it himself? You can now ask a version of that question for almost every beat. There are more and more reporters who want to have their own data and to analyze it themselves. Take, for example, my colleague, Charlie Ornstein. In addition to being a Pulitzer Prize-winner, he’s one of the most sophisticated data reporters anywhere. He pores over new and insanely complex data sets himself. He has hit the edge of Access’ abilities and is switching to SQL Server. His being able to work and find stories inside data independently is hugely important for the work he does.
    Read about this here:
    http://bit.ly/1sXWAh6

    Maybe it is time for the Analytics profession to wake up & bring some variety into their hiring-a journalist amongst their midst, maybe!


     

    Test or get Fired! Harrah’s casino’s amazing philosophy

      
      
      

    Analytics needs a evangelist! Without such a person, you just don’t get the impact that Analytics actually is capable of providing! Mostly this evangelist needs to be right at the top, the CEO!

    Of course, some CMOs have led their organizations into embracing the practice, including John Costello, former exec VP-CMO of Home Depot; John Elkins, head of global brand and marketing at Visa International; and Cathy Lyons, CMO-exec VP at Hewlett-Packard.

    One organization which has become a huge case study in the application of a “fact” based approach to business is Harrah’s Enetrtainment!

    In 1998, as Harrah’s was about to embark on wave of expansion, their CEO Philip Satre asked Gary Loveman to take a break from Harvard to become chief operating officer of Harrah’s Entertainment. The important thing was the he was not brought in as a CMO but as the COO-he had the line authority to make changes that would impact the business!!

    “In terms of income, it was actually a pay cut,” Loveman says, since he had to forego the consulting that supplemented his income as a professor.

    He went on to develop the gaming industry’s most successful loyalty and analytics program—Total Rewards—which boasts more than 40 million members.

    harrahs latest resized 600

    In an interesting article, Karl Taro Greenfeld  says this about Gary Loveman, who has since then also become the CEO:  the chief executive officer of Harrah’s Entertainment Inc., the largest gaming corporation in the world, sees his customers as a set of probabilities wrapped in human flesh.

    Since taking over as CEO in 2003, Loveman, 50, has relied on the numbers to build Harrah’s from a regional operator of 15 casinos to one with 39 in the U.S. and 13 more overseas.

    His first big move as COO was to start a loyalty program called Total Rewards, which became such a success -- growing to over 40 million members by 2010, the largest database of probabilities in the industry -- that by the time Satre stepped down in 2003, Loveman had become the logical choice to succeed him.

    Loveman earned a Ph.D. in economics at MIT and went on to become CEO, president, and chairman of Caesars Entertainment, owner of Harrah's casinos and other resorts worldwide.

    Loveman says there are three ways to get fired from the hotel and casino company: theft, sexual harassment, and running an experiment without a control group.

    But this seems like common sense, run experiments , see what works & scale up! And yet very few companies do it.

     Dan Ariely, a behavioral economics professor at Duke University and the author of Predictably Irrational, outlined some of the resistance to experimentation that he's come up against.

    “I’ve often tried to help companies do experiments, and usually I fail spectacularly,” Ariely writes. For a company struggling with getting a good bonus system in place, he suggested experiments or even just a survey. Management, he says, “didn’t want to add to the trouble by messing with people’s bonuses merely for the sake of learning. But the employees are already unhappy, I thought, and the experiments would have provided evidence for how to make them less so in the years to come.”

    But Gary Loveman managed to stay incredibly committed to Testing. These tests run from the use of coupons to offers of free meals or hotel stays, all designed to get customers to spend more money during their playtime.

    This is what he said when asked about the Testing culture: “We need to overcome hunch and intuition with empirical evidence. . . . We can start with a hunch or strong belief, but we act on it through experiment. We want evidence. We’ve gone from the introduction of experimentation as a technique to a culture of experimentation as a business discipline. We hire people predisposed to do this by temperament and by background. Organizationally, we’re committed—and I’m committed—to making sure we have the discipline to have the decisions we make informed by this evidence”.

    And yet we mustn’t forget that Harrah’s is not an easy business to run. Currently they have,$23 billion in long-term debt & have gone through some aggressive financial re structuring.

    And lastly we must also ask ourselves, is this kind of Analytics good for society! Keeping gamblers coming back may hurt them & cause a lot of turmoil in many lives! Doesn't analytics have a social responsibility!

    4 year view or a 20 year view

      
      
      

    I saw this wonderful video of Vinod Khosla interviewing Larry Page & Sergey Brin.

    4 year view or a 20 year view!!

    It raises some very interesting questions. What do companies need to do to grow? How should companies look at the Short term vs long term? Taking a 4 year view vs a 20 year view are two fundamentally different philosophies. It is difficult to solve a “big problem” in 4 years & easy to do in 20 years. Google, of course likes to take on “big problems”.

    So is Google a search company or will it be a larger Health company in the future. Or will it be an Artificial intelligence company?

    artficial intelligence resized 600

    Do have a look at this (long) but interesting video.

    http://bit.ly/1mmv34R

    So Short term vs Long term? How many traditional companies would invest in something like Google Brain- a machine learning initiative to help make computing more efficient and capable by mimicking the distributed processes of the human brain. And yet Artificial intelligence is more than 60 years old as an application area. One reason why some experts believe AI is beginning to achieve its long-imagined potential is the explosion of data on the web.

    So the question we need to ask is whether we have a 4 year view of Analytics or a 20 year view?

    Maybe this may lead to the following questions to ponder over:

    1. Does your company do analytics or does it compete with analytics?
    2. Does "deep personalisation" have a role to play in your company & industry?
    3. Do analytics team participate in deeper strategic & longer term decisions in the company?
    4. Do Analytics folk with their deep specialist background have the skills to participate in such initiatives?
    5. Will unsupervised techniques like AI begin to threaten the Analytics profession (as we know it now); will it reduce the need for data scientists?

     

    The Predictive shopping list & the Walmart gorilla

      
      
      

    The best shopping list is one you don't actually have to create. When a giant like Walmart changes its mind about running a Loyalty program, it is time to sit & take notice.

    Walmart has been synonymous with Everyday Low Prices(EDP). But unlike other supermarket chains like Kroger and Safeway, Walmart did not have a crucial marketing element-- A loyalty card.

    Now Walmart is taking a distinctly different route towards loyalty. Savings Catcher, which began with a seven-city test this spring and rolls out nationally this summer, automatically gives shoppers refunds for the difference between what they paid at Walmart and lower prices advertised by competitors.

    WALMART SAVINGS CATCHER AD resized 600

    @WalmartLabs in Silicon Valley is planning to make shopper data and analytics from the program available to shoppers themselves, in a departure from most loyalty programs. Walmart is building capabilities that will let people search and sort their receipts, get pie charts breaking down how they spend their money, generate "predictive shopping lists," keep a running tab of in-store purchases to stay on budget, get notifications when there's a manufacturer coupon available for an item on their list, or get the best-priced bundle of items within a pre-set budget.

    More importantly, this is an interesting trend where companies are beginning to use analytics for “consumer consumption”.

    Campaign management as you know it is Dead

      
      
      

    There is so much talk about Customer centricity. And yet no one function in a company really owns the customer. In a service organisation (banks, Retailers etc), often Marketing plays that role. But do Marketers play this role well & are they able to do the “productive conflict” that is needed with the “lines of business” to produce a Customer oriented outcome.

    Why is it that the Campaign management team is considered a purely tactical organisation?  Across banks, telecom companies & other customer facing businesses, I often observe that Campaign management is treated as a function that is at the bottom of the Analytical marketing totem pole. And yet nothing could be further from the truth. If anything, consumers have access to a huge array of channels and tools as well as a social megaphone to reach brands. This shift firmly places the consumer in the driver’s seat. And yet the “last mile” that creates engagement with customers is considered a purely tactical function. Customer centricity needs anchoring within the organization to create more meaningful impact.

    Campaign execution is boring. If it is seen as a pure “execution “job, this function will be staffed by people who automate & run tools. I am not saying that this is not important. It is crucial to correctly engage with customers. But what is critical is to have a Customer strategy & in today’s world with real time marketing, this is becoming even more critical. Often in a bank, product managers will decide what customers to contact & with what offer. In the absence of a Customer segment strategy, the bank will continuously bombard customers with offers because each product manager will drive campaigns to the customer.

    But what if campaign management is looked at more strategically, as a "real time, customer engagement team".Mckinsey shared this wonderful infographic that truly demonstrates this new reality!

    Mckinseyon demand info graphic newblue v2.ashx resized 600

    Do senior managers inside companies recognise this reality? Do HR leaders appreciate the need for this competency? Is there a skill level inside the organization to handle the customer strategy issues, the data issues, the campaign design issues and the reporting issues? And, as the complexity increases exponentially with testing and rapidly increased campaigns, is there the ability to scale those resources?

    Also do companies have a career path for people who do this? Marketing ranks low in sales-driven organizations, where the function’s leaders focus mostly on corporate communications and brand campaigns. Rethinking campaigns needs, a different CMO, much closer to peers on the executive team, who can deliver a Business impact. And who believes that campaign management can play a larger role.

    How can Marketing leaders make the Campaign management function more strategic? To begin with campaign management must connect to larger Customer strategy. A few key drivers can be:

     

    1. Support an institutional memory of the customer-different silos or “lines of business” creating campaigns & running them independently means that you do not have a centralised contact history or “intelligence” about customer response. Building this is not just an IT job of building a data mart or data warehouse. Rather it is an ongoing effort to create Customer intelligence in a central environment.
    2. Enable dialogues not just campaigns. If campaigns are seen as just “list pulls”, then anyone who knows basis SQL should be able to do the job. But the consumer is no longer ready to listen to “push marketing” & the creation of a “dialogue factory” is one essential element of a strong Customer strategy.
    3. Creating a Digital campaign management Hub : Important to develop a customer segment-based organisation structure with a single function owning customer contact strategy. This is not easy to do & many companies struggle without it. One way is to centralise the campaign management organisation which unifies inbound and outbound marketing programs. It also bridges the online and offline gaps-now Campaign management is not only about sending an email or a sms.The Digital hub therefore needs a variety of skills-traditional campaign management combined with string digital thinking.  In the Digital hub, one integrated team does: social insights, customer strategy & campaign execution across channels.

      4.    Create a Customer Intelligence Unit: Who owns client insights and the ultimate customer value proposition? Customer intelligence is different from Business intelligence.Analytics can provide a huge diffrentiator to how companies understand their customers.

      5.    Establish a strong Customer management council: group of top leaders in the company who are able to mediate to solve the issues that arise out of taking customer centric action. This council becomes a strong enabler for Campaign management playing a differentiated role.

       

    3.   

    All Posts